8) Third Party Beneficiaries

Question 1

3rd party beneficiaries: def

Answer 1

3rd party who will benefit from promisor’s action in a k

ojo! both parties can be promisors, of different things

Question 2

3rd party beneficiaries: kinds

Answer 2

1) creditor beneficiary (intended)
2) donee b. (intended)
3) incidental b.

Question 3

3rd party beneficiaries: intended beneficiary: kinds

Answer 3

(creditor or donee b)

Question 4

3rd party beneficiaries: intended beneficiary: def

Answer 4

someone the k-ing parties INTENDED to benefit (often, but not nec, named in k)

Question 5

3rd party beneficiaries: creditor beneficiary: def

Answer 5

promisee seeks performance from promisor to satisfy obligation owed to a 3rd party

Question 6

3rd party beneficiaries: donee beneficiary: def

Answer 6

promisee seeks performance form promisor in order to make a gift of that performance to 3rd party

Question 7

3rd party beneficiaries: incidental beneficiary: def

Answer 7

3rd party who will benefit from promisor’s performance as a practical matter, but not intended beneficiaries

Question 8

3rd party beneficiaries: who can sue??

Answer 8

1) must be INTENDED (creditor or donee)

2) can only sue THE PROMISOR (not promisee)

Question 9

3rd party beneficiaries: vesting of 3rd party rights: result

Answer 9

parties may no longer modify or rescind the 3rd party beneficiary provision w/o consent

Question 10

3rd party beneficiaries: effect on modification

Answer 10

parties can only modify/rescind the 3rd party benefit provision w/o consent IF RIGHTS HAVENT VESTED YET

Question 11

3rd party beneficiaries: vesting happens when:

Answer 11

1) beneficiary sues
2) b. changes position in justifiable reliance on the k
3) b. manifests assent to k (at request of promisor OR promisee)
4) rights of beneficiary have vested under express k terms

Question 12

3rd party beneficiaries: defenses to promisor

Answer 12

any valid defenses promisor has ARE ALSO effective against 3rd party beneficiary (but must be from this transaction)

Question 13

note! material breach is a

Answer 13

DEFENSE!

Question 14

assignment vs offsets

Answer 14

obligor (?) can’t offset if knew about the assignment

Question 15

is beneficiary INTENDED beneficiary? factors

Answer 15

: (1) whether the third party is expressly identified in the contract;

(2) whether the agreed performance runs directly to the third party; and
(3) whether the third party could reasonably rely on the contract as having been intended to grant a benefit to him.